Why broadband matters: An interview with TechConnect's Rick Ritter - Focus

BYLINE: Eddie Kovsky

Rick Ritter is the president of TechConnect, a public-private partnership that helps develop Idaho businesses. What does TechConnect do? How does it serve the state? The whole premise behind TechConnect is turning Idaho ideas into Idaho businesses. What that means is we're taking ideas from Idaho universities, individuals, national labs and other businesses and turning them into businesses that become part of the economic picture of Idaho.

The big reason we focus on that is that companies that start someplace tend to stay in the place. We think that's an important strategy to growing Idaho companies. There are other people doing external recruiting. There's nobody doing the job we're talking about, the internal growth. We think that has to be a major part of the economic strategy of the state. What are the other areas of focus? The next area (after development)  is collaboration - other parts of the state working with business. And that means universities, federal laboratories, and business to business. Universities and federal laboratories have ideas, but they're not very good at starting businesses. The idea is that if you can get those relationships built and get those ideas from the universities and laboratories to the right companies we ultimately get what we want out of that, which is revenue and taxes and jobs. The third part is advocacy. It's about making sure the business environment in the state is competitive for small companies and large companies alike. A lot of times large companies get things through the Legislature, but it doesn't really have any benefit for the small companies. What is your background? How did you get involved? I came back to Idaho Falls in 1995 and got into managing the Idaho Innovation Center,  Idaho's oldest small business incubator. We built a whole new facility that was tied very closely to the Idaho National Lab. Everything that was in that building was technology transfer that came out of the laboratory. The contractor at the time, Lockheed, was interested in doing lots of startups because every time they did a startup they earned a million dollars as part of their fee. So every time they set a business out: ka-ching, ka ching, ka ching! It didn't take them very long to figure that out. Then I got a job offer I couldn't refuse: to start a graduate engineering program in the College of Engineering at Boise State University. While I was in Idaho Falls I cultivated a pretty good relationship with all the deans of the colleges of engineering simply because there were things that I would need from them. I'd known Dean Lynn Russell for several years. Every time I'd come home to Boise I'd go over to visit him. One day he said 'I'm getting ready to do this. Would you be interested in coming back?' So I spent a year and a half starting the graduate engineering program in the college of engineering. Then in late 2001 I got a chance to go across the street to the Small Business Development Center. They recruited me to help companies fund research and development. We went out to Nampa in late 2002 when the TECenter opened. That's sort of where I've been since then. A lot of what we're doing at TechConnect is sort of the same as what we're doing at the TECenter but we're sort of doing it in a virtual fashion. What we're doing is without geographic location. We use the same commercialization model, we use a lot of the same documents and work plan process. Of all the Idaho businesses you've worked with and helped start up, how many of them are dependent on broadband access for their business model? Almost all of them are. The sector we really focus on is the traded sector. What that means is that these are all companies that will never sell a product or service in Idaho. They're selling beyond the state and bringing revenue back to the state. While there's nothing wrong with people who just trade dollars in a community, at the end of the day those dollars need to come from someplace. MetaGeek is a good example. They've actually sold more of their devices outside the United States. To do that the one thing you've got to have is broadband. One of the things we've run into pretty regularly is that we've got companies in places you'd never suspect they were. The big problem they've got is that they have to rely on dialup or they've got limited broadband access. It's not broadband as we'd define broadband. To us, broadband is three to five megabytes, and they're talking about 256 kilobytes. We don't even consider that to be broadband. Even the Federal Communications Commission is recommending that everyone get at least one megabyte. Even at three to five megabytes we're behind other countries that are running 30 to 50 megabytes. We've got a lot of places in Idaho that can't get to one megabyte. That sort of puts these companies at a handicap, though some of these companies have overcome that. They've cut a deal with people who have access to bigger pipelines. What they've had to do is [collect] orders [on someone else's network] and then in the evening they'll fax back the orders they got that day. People are very creative and very innovative about how they solve those problems. Our guy Hank Artis in the north is working on a project that will be interesting to watch. A couple of years ago the Nez Perce tribe got a huge, I think the single largest, utility grant that's ever come to the state of Idaho. They built out their reservation with huge pipelines, putting broadband all over the reservation. And unfortunately, St. Maries, which is sort of surrounded by the reservation, didn't get the benefit of that. One of the things Hank has been doing is getting the people from the reservation and the town to sit down and talk about this. It looks like we'll have a situation up there where the reservation is providing service to all the businesses in St. Maries. We expect that when they get that you'll see some of these businesses begin to expand and hire more people. I expect we'll see some other things like that in the future. Broadband is a key piece, particularly in the rural areas. We were hoping this broadband money [from the Legislature] would get a second shot this year, and we're not sure that's going to happen or not, but we're not depending on that while we're looking at other resources. Even if we don't get broadband money from the legislature we may be able to piece that one together. Ideally it would have been good to target that money. A lot of people who have retired to Idaho need broadband access. A good example is a woman in Salmon who is like the 103rd employee at Microsoft. She made a bunch of money and retired to Salmon. She was retired for three or four years when she got a call from Microsoft asking her to do some part-time work. She was one of the designers of the Windows 95 packaging. They were looking for her to do some work like that. They need to ship these huge files back and forth. But she had no broadband access. So what she did was she went to downtown Salmon and opened a little tee shirt shop right next door to the central office of the telephone company. She could get high speed access there and download the files, take them home, work on them, and then ship it back to Microsoft from her shop. Do you have any idea how much of the state has broadband access?   The two issues for me are accessibility and cost. It's one thing for somebody to say that everybody in the state has access - that's probably true. Do we have affordable access? That's a whole other issue. Just like anything else, when a business looks at a service they have to ask how much does it cost? Does it make business sense? All you have to do is watch national television and see what other companies are selling broadband access for - the state of Idaho is not competitive from a price perspective. The other part is access - is it access to 256k, is it access to one megabyte, is it access to 3 to five megabytes? Not everyone in the state have access to one megabyte. There's nothing you can do in education at 256k. Most people will tell you it's a minimum of three to five megabytes to get a classroom broadcast into a home or access to download information. It's all in how you define that access. Most people have access to 256k, but in my mind that's not access. I've had people tell me they can buy satellite service, but it's not fast enough. Are there a lot of rural Idaho towns that technically have broadband access, a line going into the phone company downtown, but it doesn't get distributed from there? It's a pretty limited geographic distribution. The other reason for having broadband, besides business, is for education and health care. One of the things that could bring down the cost of health care in these rural communities is having access to sufficient broadband to send x-rays and do video conferencing. Most communities don't have sufficient broadband for that, and the places that do it's primarily because places like St. Al's and St. Luke's have helped the community make the investment to do that. That hasn't come as the result of anything a particular telephone company has done. What do you think the biggest obstacle facing Idaho's technology sector is? Right now it's skilled people. There's a real shortage of software programmers. These guys are rare. One of the things we've been kicking around the office is maybe what we ought to do is figure out where these guys are, go to where they are, and recruit them as individuals to Idaho. One of the things I've said jokingly is I wonder how long I can stand in front of Microsoft's headquarters with a sign that says "Programmers needed for Idaho" before they have to call the cops and escort me off. I think sometime in the spring we may take a trip to Seattle and Portland. TechConnect Research VP Krissa Wrigley was in Portland for a couple of years working for the state of Oregon, and she was always amazed by the number of people, beginning about noon on Friday, who would leave town with bikes and kayaks to drive an hour or two to get someplace and do these activities. We think that we can appeal to these programmers who are avid outdoors sort of folks [by telling them that in Idaho] in five minutes you can be fishing and in 35 minutes you can be at Bogus skiing. If we find the right message and direct it at the right programmer we think that will offset the fact that they're not making quite as much as they could in Seattle. It's a strategy we're going to attempt. There's another solution we don't have any control over - working with the schools and getting them to train more programmers. But the problem is that's a longer term solution. These companies can't wait two years, three years, four years to find programmers. A lot of states have adopted the strategy of recruiting talented individuals rather than companies. We'll try it with programmers and if it works with programmers we'll try it with other folks. Wouldn't if be easier to adopt the Science and Technology Advisory Council's recommendation to create a marketing campaign to sell Idaho rather than hand picking people? I think you're going to find that traditional campaigns don't work with these folks. Probably 95 percent of guys who work in these industries don't read the papers. They don't pick up magazines. Advertising and traditional media doesn't get to them. It probably gets to their boss, but does their boss want them to see this? It needs to be Web based - that's how they get their news. If it's not on the Web it doesn't exist for them. Does it take $2 million to build a Web presence? The answer is no. We're building a web presence that will have pieces of this. It'll cost us maybe 10 grand. We do the same thing with TechConnect. Aside from the little brochure we've got, we've eliminated anything that's in the traditional media. That's the limit of our printed stuff. We did it more for the project we did for the Legislature. We're only using it to drive people to our Web site. That's it. I'm not a big fan of recruiting companies. If we recruit them in, someone else can recruit them out. It's a zero sum game across the country. Idaho benefits, but who's to say someone doesn't come along with a sweeter package? I've always been a big fan of creating our own companies and expanding our own companies as much more effective. How do we get talented people here? You have to get inside the head of these talented people and figure out what appeals to them. It's a whole different mentality of who do you get to these folks. It's not though big glossy magazines. Who has time to sit down and read hard copy of this stuff? We're not interested in the mass media, we're interested in specific segments. Just taking an ad out in the old Statesman hoping maybe they read this is just too expensive these days.

 Broadband - a history There is not a comprehensive account of state activities related to broadband development, largely because there has not been a comprehensive government effort to develop broadband, Office of Science and Technology employee Brian Dickens said.   "Many efforts have been made to develop some entity, ranging from a single, state CIO, to a Blue Ribbon Task Force, to an Idaho Broadband Development Steering Committee," Dickens said. "All of these efforts have failed to gain support from either the governor or the Legislature. "   2001 - Governor Dirk Kempthorne's "Connect Idaho" initiative began, resulting in the Idaho Broadband Telecommunications Tax Credit. This tax incentive spurred large investments by several telecom providers, including some of the small providers that make up Syringa Networks. These investments resulted in fiber optic connections to Salmon, Challis, Mackay, Stanley, Council and several other communities, as well as upgrades in many locations throughout Idaho.   The tax credit is still in effect - a company investing in broadband infrastructure gets a transferable credit for 3 percent of its total investment, up to $750,000. 2005 - Idaho's three state universities and the Idaho National Laboratory began studying the development of an Idaho High Speed Optical Research Network. The lab commissioned a $150,000 independent study in 2006 to determine the cost of developing the "research only" network that would link the four institutions together, permitting collaborative research, grid computing and high-speed modeling by connecting to super computers on the National LambdaRail. This kind of collaborative capability is often a requirement for federal funding opportunities. Idaho has lost grants to other states due to its limitations in this area. The network would cost between $17 and $30 million to construct and $600K to $800K per year to maintain and operate. To date, no funds have been appropriated for its development. 2006 - Private-sector interests proposed a $25 million matching investment program to expand broadband service in rural communities. The State Legislature appropriated $5 million for the Idaho Rural Broadband Investment Program. The Department of Commerce & Labor administered the program, which delivered broadband to 79 rural communities. Qwest, Verizon, Syringa, and a few small telecoms won matching grants for the project, which totaled a $10 million investment. The Governor's Science & Technology Advisory Council proposed a continuation of the Idaho Rural Broadband Investment Program with an increase to $10 million in matching grants. Governor C.L. "Butch" Otter did not include the program in his budget.